Manus ‘friends’ investors with $500 million fundraising as former buyer turns rival

Returning investors like the AI agent operator for its experience making and selling practical software as Meta and other tech companies compete for the same work

• Manus has raised more than $500 million after its founders and earlier investors bought the company back from Meta
• Its new Cue personal agent competes directly with Meta’s Muse, while major Chinese tech companies are pursuing similar customers

By Hu Minghe

Manus once looked set to build its future as an agentic AI operator helping users perform everyday tasks like booking tickets and ordering products online from inside the Meta Platforms (META.US) universe. Now, the Chinese-founded startup, freshly divorced from Meta, has raised more than $500 million to pursue that future independently, while its former buyer competes for the same business.

Manus parent Butterfly Effect announced the financing on Oct. 8, naming Boyu Capital and IDG Capital as co-leaders of the round. Existing big-name investors including Tencent (0700.HK), HSG and ZhenFund also participated.

The money gives Manus new ammunition to turn its early success with AI agents into a lasting business. These applications carry out research and other computer tasks for users, going beyond simply answering questions. Manus helped popularize that promise when it made its public debut in March 2025. But as more larger companies offer similar capabilities, Manus’ early-mover status is becoming less important.

Its return to independence followed an unusual round trip. Meta announced its acquisition of Manus in December 2025, in what was seen as a major validation for China’s efforts to make AI more practical and commercial. But then China’s national economic planner took the unusual step of ordering the deal unwound on April 27, and Manus formally resumed independent operations on Sept. 1.

Its founders and earlier investors helped buy the company back from Meta at a reported $2 billion valuation. Bloomberg reported in September that Manus was seeking a $4 billion valuation for its next financing, twice the buyback figure. The company did not disclose the final valuation from its latest funding round.

For those returning investors, the appeal goes back well before the excitement surrounding AI agents. They are backing founders for their experience building practical software and persuading people to pay for it – two relatively rare commodities in the young AI sector.

Top team

Manus Chief executive Xiao Hong started out creating tools for WeChat, helping users edit public-account posts and manage customers in China’s leading social app. He established Butterfly Effect in 2022 and began working on Monica, an AI assistant available through a browser extension.

Chief scientist Ji Yichao brought experience building a mobile browser and working on search. Product partner Zhang Tao had worked on international products at ByteDance before leading product development at AI startup Light Year Beyond. Their backgrounds combined the technical work of building applications with experience selling them.

Some investors followed that development for years. ZhenFund partner Liu Yuan said in June 2025 that his firm had invested five times in Xiao Hong and his team across their ventures since 2016. He also helped introduce Ji to Xiao when the latter was exploring an AI browser.

Manus moved its headquarters and core team to Singapore in 2025 as it expanded overseas. But Xiao and Ji were reportedly prevented from leaving China after regulators summoned them to Beijing in March this year to examine the Meta acquisition.

Despite that, development at the company continued. Xiao, Ji and Zhang coordinated with their Singapore colleagues through daily video calls, and the company continued releasing updates. Meantime, business for the Manus AI agent was exploding, with annual recurring revenue exceeded $300 million during the investigation, according to a LatePost report in August.

Xiao expressed his hopes for a fresh start in a late-September post on Chinese social platform Jike. “I thought our journey would end as a footnote. Perhaps we have a chance to write a chapter,” he wrote.

That ambition soon took a more concrete form. On Sept. 28, Manus launched its 2.0 version and Cue, a separate app for personal agents. Cue gives agents their own email addresses, phone numbers and computers so they can handle tasks on a user’s behalf. It puts Manus squarely in competition with Meta’s Muse, launched earlier that month with a similar promise of a personal agent that gets things done.

Life goes on

With the Meta-Manus separation complete, Xiao and Ji’s travel restrictions were reportedly lifted by Oct. 8. Manus was expanding its Beijing team while retaining its Singapore base. A product was being prepared for the tightly controlled China market, where its Manus 2.0 and Cue aren’t available and most of the major global players aren’t active.

Meantime, the competition abroad already extends well beyond Meta. OpenAI’s dots, available through ChatGPT, can research topics, analyze data and prepare documents. Anthropic began merging Cowork and chat into Claude in September, bringing more work into its main assistant, including handling files and operating a user’s computer through its desktop app.

Those capabilities make the case for a separate Manus subscription harder to sustain unless the Chinese company can deliver noticeably better results. At the same time, Manus may also suffer from concerns about data privacy linked to its China roots, similar to TikTok, leading some global users to opt for rival products without such ties.

China offers another market for Manus to pursue, but that market is also quite competitive. Despite its position as a key investor, Tencent also offers its own WorkBuddy in China for office tasks and CodeBuddy for software development. Alibaba (BABA.US; 9988.HK) offers Qoder coding tools and QoderWork for desktop collaboration, while ByteDance’s Doubao Work also handles research, documents, spreadsheets and data analysis.

Xiao’s response is to keep the company’s ambitions broad. In his Jike post, he compared the business to selling computers: people mainly buy them to work, but also want entertainment and creativity. That gives Manus, which relies on other developers’ underlying AI models, more uses to pursue.

Its new Cascade system offers one example of how it is trying to do that. Manus says the system brings in specialized capabilities only when a task needs them, reducing unnecessary processing and saving computing power. Cascade cost 32% less to run than its previous system in one tested configuration, though that’s a company-reported result.

If Manus can repeat those savings across everyday tasks, it would have more room to improve its margins or offer better prices. Another strong advantage would be completing work reliably enough that customers need to spend less time checking and correcting it.

That operating record will matter if Manus eventually seeks a public listing. Reuters reported that a Hong Kong IPO would not begin until at least 2027, leaving the company time to show what it can achieve independently.

Its returning investors have already backed the founders once, helped buy the company back and supplied fresh money for expansion. Whether their confidence is justified will depend on whether customers believe that Manus still does enough useful work to keep subscribing.

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